Shell has reported a remarkable surge in its quarterly profit, reaching $10.81 billion, nearly doubling its earnings from the same period last year. This significant increase, announced on Thursday, comes amid soaring refining margins and geopolitical tensions that have driven crude prices higher.
The oil giant's adjusted earnings, a key measure of net profit, jumped from $5.43 billion a year ago, marking the strongest performance since the second quarter of 2022. This period followed Russia's full-scale invasion of Ukraine, which had already disrupted global energy markets. Analysts had anticipated a profit of $9.92 billion for the July to September quarter, according to a consensus compiled by LSEG.
Refining margins reached a record $42 per barrel, surpassing the previous high of $28.04 per barrel set in the second quarter of 2022. This aligns with Shell's earlier forecasts. The company's shares, listed in London, rose by approximately 3% in morning trading, achieving an all-time high.
In response to the robust financial performance, Shell announced a $5 billion share buyback program to be completed over the next three months, an increase from the $3 billion buyback in the previous quarter. CEO Wael Sawan highlighted the company's strong operational performance amid what he described as a "continued severe disruption to the global energy system."
Meanwhile, TotalEnergies, another major player in the oil industry, also reported substantial gains. The French company more than doubled its adjusted net income to $9.1 billion in its third-quarter results, benefiting from historically high refining margins both in Europe and globally, according to CEO Patrick Pouyanne.
The volatility in crude oil prices has been exacerbated by geopolitical tensions, including the U. S.-Israeli conflict with Iran and attacks on ships in the Strait of Hormuz. On Thursday, Brent Crude, the international benchmark, was priced at around $114 a barrel, a significant increase from approximately $65 a barrel a year ago, despite ongoing efforts to stabilize crude flows.
Across the Middle East, tensions remain high, with reports of the U. S. and Iran considering the resumption of military strikes, while Saudi Arabia faces attacks from Houthi militants. Additionally, a global shortfall in refining capacity, worsened by strikes on Russian refineries, has driven up the prices of gasoline, diesel, and jet fuel.
In response to surging pump prices, the Group of Seven nations agreed earlier this month to release emergency diesel stocks, as consumers increasingly feel the impact on their wallets.
